But Dr Brash says it's not the Bank's job to keep house prices in check - only the Government and Auckland Council can do that.

"Controlling Auckland house prices is not a Reserve Bank responsibility, and we know from the experience of the last couple of years, changing the LVRs has only a temporary effect on Auckland house prices. It isn't the solution."

Dr Brash led the Bank for 14 years, and says presented with the current situation would have said "pretty much" the same things Deputy Governor Grant Spencer did on Thursday.

Asked how much Auckland houses should cost, he says "about one-third of what they are now", which won't happen without a market crash.

He says there's no way to build affordable houses without existing homeowners taking a hit.

"If you can build a house down the street for $300,000, why would you pay $900,000 for a house three miles away? You can't do it."

In addition to creating supply, he says the Government needs to look at migration, which is at record highs - but that might fix itself without any intervention, particularly if the Australian economy booms again.